Under the terms of the deal, CVS will purchase the Cincinnati-based long-term-care facilities pharmacy services provider for $98 a share in cash. The $12.7 billion enterprise value of the deal includes about $2.3 billion in debt.
The purchase will help CVS expand its ability to provide prescriptions to assisted-living and LTC facilities, serving the rapidly aging American senior patient population.
The transaction is one in a series of deals in the pharmacy benefits management sector.
In March, UnitedHealth Group (UNH) said that it would acquire pharmacy benefits manager Catamaran (CTRX) to combine with its OptumRx group for $12.8 billion. Earlier this year, private-equity firm TPG Capital sold its pharmacy benefit management business Envision Pharmaceutical Holdings to strategic buyer Rite Aid (RAD) for $2 billion.
Woonsocket, R.I.-based CVS said in a statement Thursday that it expects the transaction to be 20 cents accretive to adjusted earnings per share in 2016.
The company secured $13 billion in unsecured bridge financing from Barclays and expects to put in place financing in the form of senior notes or term loans before the transaction closes. CVS expects the deal to close by the end of this year.
The graying of America is a trend that has been affecting health care across the board, and pharmacy benefit management is no different. From home health care to helping seniors age in place, to technological advances to help organize patients easier in the system, the aging population has made the health care sector a hot spot for deals as Americans age into assisted-living facilities and independent-living communities.
"The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy dispensing channel," CVS President and Chief Executive Larry Merlo, said in a statement.
"It also creates new opportunities for us to extend our high-quality, innovative pharmacy programs to a broader population of seniors and chronic-care patients as they transition across the care continuum," he said. "We have been impressed by the Omnicare team and what they have created for the patients they serve."